Introduction

One of the major controversies among left-wing activists today is
what attitude to take to the
Castro regime and the type of society it built in Cuba.
Undoubtedly, the 1959 overthrow of the
brutal, U.S.-backed Batista regime
was a great victory for the Cuban masses. In the wake
of this
triumph, a series of social reforms benefiting the downtrodden were
carried out by the new
regime. Within a couple of years, the new government
nationalized U.S. and other foreign
capitalist companies as well as the large businesses of the Cuban
bourgeoisie. Castro, who had
come to power under the banner of merely reforming Cuban capitalism,
suddenly announced he
was taking Cuba on the road to communism.

Since then, many left-wing trends have considered support for the
Castro regime an article of
faith. They see the last four decades as basically a
continuation of the revolutionary process in
Cuba. With the collapse of the Soviet Union and the
degeneration of China into open tyranny and
market capitalism, there are those who cling to Cuba as the genuine
model of socialism which
has avoided the pitfalls of the other allegedly "communist" countries.
Others criticize Castro
policies in varying degrees, but hold on to the view that Cuba is still
a "workers' state" of some
kind or at least "anti-imperialist". Among those who
hold this sort of position are the
pseudo-Marxist trends who traditionally identified with the Soviet
revisionist system and nearly
all the Trotskyist groups.(1)

But however comforting it may be to think that the flame of
revolution still burns brightly in
Cuba or that Cuba has found the way to the communist future, this
analysis will not stand
scrutiny. In a series of articles, Communist Voice
has detailed how the Cuban revolution died
long ago.(2)
In its wake, a new sort of class tyranny was erected in
which the existence of state
property did not signify the building of socialism but state-capitalism.
The new ruling class was
not the private owners of the past, but the top party and state
bureaucrats. The main means of
production were controlled by this new elite while the masses had no
say in how the system
operated. While state property dominated, real
accounting and control by the working people was
never established. Thus beneath the veneer of a
planned economy, the anarchy of production
typical of capitalism reigned. Private interest
reasserted itself in the state sector as each
enterprises' success depended on its own financial health instead of
how well it served a social
plan. As the enterprise managers and the party/state
leaders were de facto owners of the
economy, it followed that they should see fit to help themselves to a
relatively luxurious lifestyle
by appropriating a portion of the wealth created by the toilers.

Far from breaking the mold of the corrupt revisionist (phony
Marxist) path that led to the
debacles in the Soviet Union and Eastern Europe, Cuba too has seen its
revolution evolve into
state-capitalism, and its state-capitalism evolve toward private
capitalism. This process was
accelerated by the collapse of Soviet "socialism" which long ago had
established its state
capitalist system which largely provided the model for the Cuban system
and on whose aid and
economic ties Cuba had been dependent. More and more,
Cuban enterprises are evolving into the
more standard capitalist forms, e.g.,
the creation of corporations legally controlled by small
groups of the elite, a major influx of foreign capitalist corporations
and the ability of them to buy
up Cuban enterprises, and increasing room for the creation of small
private businesses.

What attitude one takes toward the so-called Cuban "communist" path
is an important matter
for all those who are sincerely interested in the fate of the Cuban
workers. Their revolutionary
future can only proceed through a struggle against the Castroite rulers
and the re-establishment of
a genuine Marxist-Leninist trend. But the importance
of this critique extends beyond the situation
in Cuba. Examining how the Cuban revisionist economy
and social structure functioned helps
uncover the basic patterns common to revisionist state-capitalism in
the Soviet Union (since
Stalin's reign), China, and elsewhere. The general
issue at stake is what does and does not
constitute a Marxist conception of the transition period from the
revolutionary overthrow of
capitalism to the attainment of classless, communist society.
Thus, the question of whether Cuba
is state-capitalist or really a revolutionary society is not a minor
quibble, but a important dividing
line between genuine communism and its counterfeit.

I: How was production
organized

Petty-bourgeois
revolutionary leaders nationalize much of the
economy

In previous articles we have chronicled how in the 1970s, the Castro
regime built up a
state-capitalist order based in large part on the type of capitalist
market reforms that were being
pushed by the Soviet revisionists at that time. This
system has been the basis for the evolution of
Cuban state-capitalism toward private capitalism that is still ongoing.
Here we will look at some
of the major features of how the Cuban system developed in the period
leading up to the 70s.

The program that carried Castro and the July 26 Movement which he
led to power at the end of
the 1950s did not go beyond capitalism. It aimed at
such things as turning more land over to
small farmers, providing certain social programs, ending Batista-style
tyranny and corruption,
diversifying from sugar dependence and fostering domestic Cuban
business, and getting a better
deal in relations with the U.S.
Initially it had the support of some sections of the Cuban
bourgeoisie, and even the U.S.
government had hopes that it might reach an accommodation with
it. In its social content this was a
bourgeois-democratic revolution and its main leadership was a
radical section of the petty-bourgeoisie.

The nature of the revolution as described by Castro in his April 24,
1959 speech in New York
City's Central Park included the following points:

"I have clearly and definitively said that we are not communists";

"The gates are open to private investments that contribute to the
development of industry in
Cuba";

"It's absolutely impossible for us to make progress if we don't
come to an understanding with
the United States";

"Democracy that talks only of theoretical rights and forgets the
needs of man is neither sincere
nor true. Neither is the dictatorship of a man nor the
dictatorship of a class, or groups, of
castes, nor of an oligarchy". (Here Castro opposes the
class rule of the workers as
undemocratic and creates illusions that the material well-being of the
masses can be
accomplished without class rule, i.e.,
under capitalism.)(3)

Despite the non-socialist nature of this program, it was carried out
in a resolute manner that
stepped on the toes of U.S. interests
and incurred the wrath of a large sections of the Cuban
bourgeoisie, including those bourgeois who were previously in an
alliance with Castro. In the
course of this conflict, the new, young Cuban regime wound up
nationalizing the imperialist
enterprises operating in Cuba as well as the larger Cuban industrial
facilities and farms. Thus
within a couple of years the Castro regime had created a very large
state-economic sector. For its
part, U.S. imperialism attempted to
bully Cuba through an economic embargo and topple the
regime with the infamous Bay of Pigs invasion.

The imperialist efforts to strangle Cuba caused many problems for
the new regime. But as we
shall see, various of the ills that have beset Cuba for the last four
decades cannot simply be
attributed to the U.S. embargo.
The policy of the Castro regime must also be exposed.
Supporters
of the Castro regime often try to portray criticism of the regime as
simply U.S. government or
right-wing "gusano" propaganda. But in fact this
article relies a good deal on information from
sources who have been generally sympathetic to the regime and even the
views of top Cuban
leaders.

Having nationalized the larger capitalist businesses and having
initiated strong economic ties
with the Soviet and Eastern European revisionist regimes, by 1961
Castro claimed that he was
really a "Marxist-Leninist" and Cuba was going to be a communist country.
However, in reality
the Cuban regime's sudden transformation was not ushering in socialism,
but amounted to the
grafting of the theory and practice of Soviet state-capitalism onto the
previous petty-bourgeois
radicalism. Indeed, it was typical of the
petty-bourgeois attitude toward the masses that the
regime could announce it was socialist without bothering to have first
let the masses in on this
little secret! For the Castroite rulers, their
allegedly socialist society was something that they
could build even if the workers had not really been prepared for it or
had any say in the matter.

How did production in
the state economy operate?

Though the Cuban leadership had nationalized much of the means of
production, this does not
prove that it was on the road to socialism. True,
Marxism holds that to achieve socialism, the
former capitalist property must stepwise become state property.
But Marxism also holds that the
existence of state property in and of itself does not mean that society
as a whole directs
production, and it is just such social control of production which is
the basis of socialism. In light
of this, and the history of four decades since the revolution, it is
clear that the nationalization
carried out by the Castro regime proved not to be a component of a
transition to socialism. One
must look beyond the mere fact of nationalization and see how the state
sector actually operated.

In the 1960s, there was a strong tendency among the new Cuban rulers
to imagine that within a
few years the country would be at the doorstep of classless communist
society. The idea that
Cuba was on the verge of communism became the official banner of the
Castro government
particularly in the late 60s. One of the factors that
apparently gave rise to this idea was that in
form, large numbers of individual workplaces were
considered to be mere departments of one
huge enterprise. This was part of what became known as
the budgetary-finance system.
But
despite government decrees that gave the appearance of societal control
of production, something
else was going on. The budgetary-finance system was
not the product of the step-by-step
development of conscious control of the enterprises and the central
bodies by the masses. Rather,
it was initially established as the regime's response to suddenly
finding itself in control of a lot of
nationalized enterprises, many of which lacked funds of their own
and/or any competent
managers. The emergency measures may have been
necessary, but the regime's painting of this as
something approaching communism was creating an illusion.

What was actually going on in the economy was a million miles from
communism. Overall
planning was largely a fiction despite the existence of central
economic bodies apparently in
control of everything. Enterprises that were supposed
to be behaving as parts of a single firm
commonly acted as if they hardly knew each other.

One example of this is that individual firms tended to "max out"
their budgets with little regard
for how this would affect the central financing institution which
supplied all the funds for their
production and that of all the other enterprises covered by the
budgetary finance system (all funds
acquired by the firm for its goods/services were deposited in the
central fund). Production targets
might be reached by some firms, but such inefficient use of resources
was bound to sap the
ability of the economy to increase or even maintain its output of goods
and services. According to
the president of the National Bank at the time, "In 1961, 1962 and
1963, the State budget was in
deficit. During the same three years, the budgetary
enterprises stopped contributing substantial
amounts to the budget...."(4)

Compounding the problems of replenishing the central fund was that
the managements often
never bothered to pay or collect in transactions between their firms.
Presumably, firms that did
not pay could accumulate more funds for themselves.
Meanwhile, the unpaid firm was still
guaranteed its financing from the central funds. This
problem was so rampant that special
legislation (Law 1007) was passed to punish offenders.
It apparently had little effect however as
the National Bank president reported "an average of 20 thousand
infractions per week for a value
of $20 million [pesos]."(5) The Bank
president was part of a section of the Cuban leadership that
became disgruntled with the budget-finance system and contended that if
only enterprises were
self-financing, such problems wouldn't exist. The
"self-finance" system was sanctioned for the
agricultural and foreign trade sectors in 1962. But
the Bank president had to concede that the
initial results showed that the self-financing enterprises had an even
worse record of violating
Law 1007 than the budgetary finance system. In fact,
since the 1970s the self-financing system
has been dominant in Cuba. But as has been chronicled
in previous articles in CV, far from
overcoming economic anarchy it has led to ever-greater strength of
private interests and anarchy
of production.

The problems that arose under the budget-finance system do not mean
the idea of having the
economy operate as a single entity is wrong as its accomplishment is
necessary for a fully
socialist economy. Nor can it be precluded that the
concessions to capitalist methods inherent in
a "self-financing"-type system could be a temporary phase in a
transition to socialism. What the
failure of both systems in Cuba indicates is that if the workers are
not actually developing their
ability to run and control the economy, no form of economic
organization will convert state
property into really socialized property.

Another widespread problem was the accumulation of unused raw
materials and machinery as
well as unpurchased consumer goods. For instance,
Cuban President Dorticos complained in
1966 about the "enormous quantity of iron that waits for the Greek
calends in warehouses that
cost foreign exchange but have no use to our economy ..."
The phenomenon of unused
industrial resources was taking place in a situation where generally
there was a problem of
shortages of material and machinery for industry. In
June, 1964 a Cuban official reported that the
"excess capacity" in light industries producing consumer goods had
reached over $84 million per
year. Part of the problem was that the enterprises
were trying to meet quantity and cost goals by
producing shoddy goods. In one case the production
cost of shoes was reduced by skimping on
materials to the point that their average life was reduced from a year
to three months. Such
practices led to consumers refusing to buy them, leading to the growing
inventories.(6)

The examples of economic chaos mentioned above were symptomatic of a
general inability to
establish economic accounting and control in the 60s.
An author sympathetic to the Cuban
revolution describes the situation as follows:

"Yet, effective planning
and economic controls are particularly weak in Cuba.
The virtual
elimination of financial controls having increased reliance on
record-keeping and
centralized decision-making, planning depends heavily on accurate
information and on
managers capable of translating this information into rational decisions.
But managers
make little use of the data they collect and frequently know little
about the financial
operation of their enterprise....
The fragile planning system is further undermined by
'overcommitment' of resources and the uncertainty of foreign supplies.
The inevitable has
occurred: First, shortages and bottlenecks have
reduced industrial capacity and worker
productivity; second, the decision-making process has
been plagued by bureaucracy, so
much so that a parallel planning apparatus that bypasses the existing
bureaucratic structure
has been created to ensure the fulfillment of urgent strategic goals
(this special apparatus is
under Fidel's personal direction)...."(7)

It's notable in this description that Fidel Castro's idea of dealing
with the economic anarchy was
to set up his own personal power structure to carry out some emergency
measures. This did
nothing to solve the underlying problems however.
Indeed, what the quote above politely calls
Fidel's efforts "to ensure the fulfillment of urgent strategic goals"
in the 60s were themselves a
fiasco which accelerated the anarchic tendencies. By
1970 Fidel had to confess the failure of his
measures in the late 60s. We shall look more at these
measures soon, but for our purposes here it
is enough to note that the need for Castro's special apparatus was
another indicator of the
rampant disorder in the economy.

Stagnation of
production

The disorganization in the economy naturally had a big negative
effect on production. In the
first two or three years after the Castro regime took power, there was
a dramatic improvement in
the conditions of the masses. This was possible not
only because there was redistribution of the
wealth from the old society that was used to reduce the gross
inequities of the past but because
there was an increase in material production due to the use of formerly
idle farm land, the
employment of large numbers of formerly idle workers and other reasons.
But the rest of the
decade basically saw economic stagnation. The last
half of the 60s saw hardly any growth in total
Gross Domestic Production, and the per capita GDP in 1970 apparently
dipped below what it
was in 1960.(8)
Writers familiar with the situation at the time report
major declines in output per
worker in the first part of the 60s.(9) This problem
persisted in the later 60s as well. The chronic
shortages of consumer goods led to the flourishing of the black market,
with all its attendant
profiteering.

Sudden expropriation
of petty businesses

Despite the great problems encountered in organizing the
larger enterprises into the state sector,
in 1968 the Castro regime suddenly decided to expropriate about 55,000
tiny businesses such as
food sellers, restaurants, artisans and various services.
The transition to socialism involves
overcoming petty production. But in this case, the
state was in no position to provide suitable
replacements for the goods and services they provided.
Moreover, a genuine Marxist-Leninist
policy toward these small businesspeople would not consider them en
masse as enemies, but seek
to find various ways to encourage them to combine their resources in
cooperatives which would
eventually prepare them for a transition to state property.

Reliance on sugar
exports, Soviet state-capitalism and the world
market

The Castro regime's decision to give up on breaking Cuba's
dependence on sugar exports also
played havoc with the economy. Reliance on the ups and
downs of the world sugar market had
been one of the major features of Cuba before the revolution, and its
overwhelming dependence
on sugar exports was a major factor cementing the domination of U.S.
imperialism. The U.S.
not
only owned a good deal of the sugar facilities in Cuba, but Cuba relied
on being able to export to
the U.S. market and relied heavily on
U.S. imports for everything else.

The original goals of the revolution included more diversification
of the Cuban economy and
less dependence on the U.S., and when
the U.S. businesses were expropriated
and the
U.S.imposed its embargo on Cuba in
the early 60s, the issue of dependence on the
U.S.ended. This of
course did not mean that U.S.
imperialism ceased to have an impact on
Cuba. The U.S.embargo
created a lot of difficulties for the Cuban economy, which had relied
on
U.S. trade and equipment for industry.
The U.S. embargo also made trade
harder with other
countries. In the first couple of years in the 60s
there was an attempt to develop domestic
industries to produce a number of goods that used to be imported.
As well, the regime sought
more diversity in agriculture and less emphasis on sugar.

This path was abandoned in 1963 however. The Castro
regime had been banking on the phony
"socialist" countries of the Soviet Union and Eastern Europe to supply
it with oil, equipment and
plants. They imagined that within a few years these
imports would allow them to carry out a big
leap in industrial development. These countries were
not operating on the basis of revolutionary
solidarity, however, and there was a heavy price to pay for economic
cooperation with them. The
Soviet revisionists demanded repayment in sugar, and they used their
economic leverage to push
their own economic prescriptions on Cuba and subordinate its foreign
policy to their own
ambitions to undermine the "threat" of revolutions so as to reach
accommodation with Western
capitalism. Castro and Che periodically expressed
irritation with the Soviet revisionists, but
never broke with the policy of reliance on them. Thus,
the U.S. imperialist domination was
swept
out but was replaced by imperialist pressure of a new type.
And thus Castro and co. began to
place ever-greater emphasis on sugar.

Meanwhile, Cuba's still extensive trade with the Western capitalist
countries (excluding the
U.S.) continued to be overwhelmingly
based on sugar exports. Before the revolution, a
downturn
in sugar prices could set the economy into a tailspin.
Under Castro, Cuba remained at the mercy
of the world sugar market. Nevertheless, Castro
ignored the peril and threw more and more
resources into the efforts to reach a huge increase in sugar
production, the famous goal of the 10
million-ton sugar harvest in 1970. In fact the 1970
harvest fell well short of this goal despite
enormous amounts of labor and resources thrown into the effort.
As well, world sugar prices
collapsed, plunging below the cost or production in 1968 and
"rebounding" in 1970 to only less
than half of what they had been in 1963.10

Castro's scheme was a disaster. Not only did the
windfall of funds from sugar sales fail to
materialize, but orienting everything toward producing sugar took a
heavy toll on other sectors of
the economy. This resulted in exacerbating the
shortages of basic necessities for the masses. For
example, the increased planting of sugar and other export crops was at
the expense of needed
food crops for the Cuban population.

This scheme also played havoc with whatever planning existed in the
economy. As one after
another emergency measure was pushed to see the big sugar drive
through, planning,
record-keeping and any open discussion of economic policy went by the
wayside.

II: Beneath the
appearance of "communist distribution"

Did communist
distribution exist?

By the late 60s, the Cuban party and state officials adopted a
number of policies which they
portrayed as "communist", distinguishing them from the lower stage of
communism often called
"socialism." The Castro regime's policies only bore a
superficial resemblance to "communism"
however. Such was the case with the diminishing role
of money economy, so-called "voluntary
labor" and communist methods of distribution of societal production.
Given the state of anarchy
in production and the inability to overcome general scarcity, there was
no way that distribution
could actually proceed along communist lines.

A system of communist distribution means that everyone works to
their ability for the good of
society without concern for direct compensation while everyone is free
to draw from social
production whatever they need. In such a system, work
is voluntary because an individual's living
conditions have nothing to do with the amount of work they contribute,
as they still must in the
socialist stage. But such a distribution system can
not be imposed without proper conditions. It
requires such things as that society is able to produce in great
abundance and that its members
have freed themselves from the habit that was imposed upon them under
capitalism of expecting
compensation for every minute worked. Such conditions
did not exist in Cuba.

True, even in a society that is still early on in the transition to
a fully socialist economy, there
will be instances of workers spontaneously working gratis for the good
of society, and these
instances of working in a communist way should be encouraged.
Undoubtedly many Cubans and
foreign activists who came to Cuba in the 60s to participate in
production brigades were inspired
by revolutionary motives. But the "voluntary labor" in
Cuba soon became largely compulsory
measures or was basically compensated
civilian or military labor shifted from their former
employment to some emergency project, mainly the ill-fated attempt to
achieve the giant sugar
harvest. At the same time as the masses were coerced
into accepting longer working hours and
more deprivations, such "moral incentives" didn't apply to the
bureaucratic elite who lived in
relative splendor.(11)
Insofar as there was equality in distribution, it
manifested itself only in a
ration system of meager consumer goods for the workers.
The workers wound up subverting the
"voluntary labor" of the late 60s, hastening its collapse.

Thus, the problem was not merely that non-communist measures were
painted in communist
colors. Nor was it that a better policy would have
been able to reach the higher stage of
communism in short order. The problem was that the
allegedly "communist" policies of the time
widened the antagonism between the new elite and the working people.
As has been documented
in other CV articles, although the regime retreated from
these policies in the 70s, they never
overcame this antagonism and their reforms cemented a system of
state-capitalism.

Pseudo-"voluntary"
labor

The Cuban regime painted a false picture of what was going on under
the banner of "voluntary
labor." For instance, in 1968 the ruling party
newspaper Granma reported that some 170,061
workers had renounced overtime pay and therefore had elevated
themselves to the status of
"communist workers". But the same article also reports
that in return for eliminating overtime
pay the regime offered social security payments of 100 percent of
wages, a considerable material
incentive.(12)
In the earlier 60s (about 1962-1966) various
"emulation" campaigns were
organized that, according to the Cuban officialdom, reflected voluntary
labor and rejected
"private gain" in favor of "emulation for the sake of increasing the
output of the community."(13)
Actually, however, coercion was often used in getting workers to
"volunteer", and there were
material rewards that involved such things as individual and production
unit level cash awards,
vacations and the possibility of procuring scarce consumer goods.(14) After 1966
the regime laid
less emphasis on cash bonuses in favor of consumer goods.
Thus, such labor was not "voluntary",
but a way for certain workers to get a bit more than was possible
through the paltry rations
system.

A good deal of the mobilization from urban areas for the sugar
harvests of the late 60s does not
really seem to have much in common with working in a communist way.
According to Rene
Dumont, "when these city dwellers spend several weeks going from place
to place, they retain
their regular salary, which is significantly higher than that of the
agricultural workers." Dumont
and others point to the low productivity of these "volunteer" cane
cutters as also casting doubt as
to their voluntary nature.(15) The
generally low productivity of what was called volunteer labor
presents a problem. Part of working in a communist way
involves achieving high levels of
productivity. But much of the labor in the "voluntary"
sugar harvests was not very productive and
tended to be a drain on economic development.

Dumont also personally examined the "Isle of Youth", a large-scale
colony to develop the Isle
of Pines off the southeast coast as a citrus fruit and cattle-producing
area. This project was
highly-touted by the Cuban government as "the first vanguard of
communism in Cuba." But
actually, Dumont describes a situation where the permanent labor force
is party soldiers assigned
there whose work was notably unenthusiastic and civilian workers who
worked like "a very
average civil servant" devoid of revolutionary consciousness.

Workers subvert the
regime's policy

While the masses were exhorted to work ever harder, the regime's
promises of relief from
austere rations never materialized. There was no
starvation, but by the end of the 1960s food
shortages were as bad as in 1962. Waiting in long
lines for basic consumer goods that arrived in
short supply was a chronic problem. The shortages fed
the creation of an extensive black market
where distribution was along naked capitalist lines, i.e.,
according to who had the most money.
Scarcity greatly impacted work habits, too.
Once workers had put in enough hours to pay for their
allotment of rations, there was nothing for their wages to purchase,
save for the black market
whose items were often too-high priced for these workers to afford.
This discouraged workers
from exerting themselves beyond what was necessary to get the basic
rations. Besides low
productivity, absenteeism became a widescale method of subversion of
the government's policy.
In 1970 daily absentee rates hit 20-29% in several regions and reached
over 50% in August 1970
in Oriente province. In 1969, Jorge Risquet, Cuban
Minister of Labor confirmed this revolt of the
workers, complaining that "undisciplined work, absenteeism and
negligence in working are
increasing phenomena...."(16)

The military
substitutes for "voluntary labor"

In order to deal with the fact that the "voluntary labor" plans just
weren't working, Castro
decided that it was necessary to bring in the military to carry out his
production plans. There's
nothing necessarily amiss about the army taking part in production in a
society moving toward
socialism. But here we're talking about the military
running key economic sectors and the forced
militarization of labor. Certainly such a policy has
nothing in common with voluntary labor, and
the increasing reliance on it toward the end of the 60s reflects the
failure of government
production plans, including those dependent on voluntary labor at the
time. Indeed, recourse to
the army betrayed a lack of faith in developing worker control and
accounting in general. Not
only were military brigades assigned to push the work through, but by
the end of the 60s, the
army officers actually replaced the civilian management structure.
Thus, agricultural workers
were sort of unofficially inducted into the army to see that discipline
was enforced. This
emergency measure did not solve the problem of agricultural efficiency
however. The military
proved to be inept in agricultural matters. Nor could
they stop the growing disdain of the workers
for the whole state of affairs.

In 1970, Castro confessed to the failure of the policies of the late
60s. An economic program
borrowing heavily from the market socialism then in vogue in the Soviet
Union was then
promoted by the ruling bureaucracy.

III: "Socialism"
without revolutionary working-class organization

The brief look at the economy above brings out the fact that the
construction of a socialist order
is impossible without the revolutionary initiative of the workers
asserting itself in running the
society and organizing the new economic system. But
Castro and the Cuban leadership were not
oriented toward building a revolutionary workers trend either before or
after taking power.
Undoubtedly the regime carried out any number of measures that the
workers liked and
established extensive social programs that prevented the extremes of
poverty commonly seen in
capitalist countries. But deprived of their own
proletarian class organization, the workers were
only mobilized to follow the orders from the new elite, not take
matters into their own hands. To
this day, the institutions of power in Cuba have never facilitated the
ability of the workers to run
society. Castro has declared himself a
Marxist-Leninist a million times since taking power, but
there can be no Marxist society if there is no workers' state, and
there can be no workers' state if
there are no means for the workers' will to manifest itself.

The history of the Cuban leadership from the period of the struggle
to topple Batista through the
1960s confirms that they never saw the working class in the role of
masters of the new society,
but as mere recipients of whatever plans the new petty-bourgeois elite
had in mind. As
mentioned earlier, the program under which the July 26 Movement came to
power did not go
beyond a reformed capitalism carried out through revolutionary means.
It had no socialist
perspective although it did envision significant state intervention in
the economy, which
however, did not distinguish it from many bourgeois development plans
in the third world at the
time. Nor did the July 26 Movement see any particular
significance to establishing itself among
the workers. The July 26 Movement did eventually
establish something of a base among a
section of the peasantry, although the program on which it established
itself among the peasants
prior to taking power was not that radical. The idea
of organizing guerrilla bands in the
countryside was not because the July 26th Movement had deep roots in
the peasant movement or
had a strategy of a massive peasant uprising, but because it was
thought to be advantageous from
a military standpoint.

The urban movement that was linked to Castro's guerrillas in the
mountains had its activist base
among the students and other elements of the middle strata. These
students had some links with
the urban workers but their idea of mobilizing the workers went no
farther than the needs of the
moment of the petty-bourgeois leadership. The urban
movement connected to the July 26
Movement was by no means orienting the workers to think beyond the
reforms its program
offered; its program was tailored to court a section
of the reformist bourgeoisie that was part of
the July 26 coalition.

Meanwhile, the state of class organization of the workers was not
strong enough to challenge
the petty-bourgeois leadership. The rural workforce
that was at least partially employed as wage
labor was very large in Cuba and was sympathetic to the revolution, but
did not exhibit a
particularly high level of mobilization. The urban
workers participated in the 1957 general strike
and were generally sympathetic to the struggle. But
their movement was not strong enough to
give rise to their own revolutionary class organizations.
The PSP, the supposedly communist
party, was under Soviet revisionist influence. They
had strong ties to the workers but had a class
collaborationist policy including a sordid history of wheeling and
dealing with the hated Batista.
The PSP at first stood against the revolutionary struggle although it
eventually joined in towards
the end. The orientation of the July 26 Movement plus
the lack of a powerful independent
revolutionary workers' trend meant that the workers' movement would be
subordinated to the
wishes of the petty-bourgeoisie in the Cuban revolution.

After coming to power, the Castroite leadership decided supposedly
to embark on the road to
socialism. But they retained their petty-bourgeois
attitude toward the workers. Castro boasted of
how clever it was to not tell the world that he (allegedly) all along
planned to establish socialism
in Cuba. Such an outlook is only possible if one
imagines that socialism is something bequeathed
to the masses like a royal proclamation rather than the product of the
revolutionary initiative and
organization of a particular class.

Part of the Castroite leadership's posture as Marxism-Leninists
involved a several-years-long
process of setting up the Communist Party of Cuba, which was founded in
1965. Unlike a real
communist party, this party was not the voice and organizer of a
revolutionary workers'
movement. Its main purpose was merging together, under
the domination of Castro's faction, the
Revolutionary Directorate (the urban-based organization linked to the
July 26th Movement), the
PSP and Castro's July 26th Movement. Thus, the
so-called workers' party was fashioned by the
cobbling together of various petty-bourgeois trends.
Mass organizations were founded, but as
they were under the control of this phony "communist" party, there was
no chance for them to be
a real voice of the masses.(17) The lack of
democracy for the workers was also reflected in the
lack of power of the rank-and-file members of the Communist Party.
One manifestation of this
was the fact that the first party congress was not held until 17 years
after the Castroite leaders
came to power.

Some may argue that it's possible for non-Marxist radical trends to
shed their former views and
become real communists. That's possible, but it's not
what happened in this case. Indeed, the
founding of the Cuban Communist Party comes at a time when Castro, Che
and other Cuban
leaders were spreading a series of theories internationally belittling
the need for workers'
revolutionary organization in general, and communist parties in
particular. While the Cuban
leaders now justified their measures with Marxist-sounding phrases,
they did not take Marxist
theory seriously. They produced fanciful tales about
the alleged "proletarian ideology" of the July
26 guerrilla bands and even disparaged the theoretical struggle in
general.(18)
The Cuban leaders
reconciled the apparent contradiction between founding their own
communist party and belittling
the party concept by pretending that all the functions of a communist
party could by achieved by
the guerrilla military organization. This is not a
Marxist theory, but it does shed light on what
actually happened in Cuba where the petty-bourgeois leadership of a
guerrilla organization took
on the trappings of a workers' political party.

Despite adopting certain Marxist-looking appearances, the Castroite
leaders had no more a
notion of developing worker control of society after they took power
than when Castro was
openly disavowing communism. The 60s was notable for
the regime's supposed concern with
relying on the consciousness of the workers. But in
practice, they tried to impose their schemes
without regard for the level of consciousness of the workers and
without much concern over the
fact that the state institutions and mass organizations were not
subject to the workers' will. The
problem wasn't simply that the Cuban leadership made some mistakes.
The building of a new
revolutionary society is inevitably accompanied by errors.
But here we have a case where the
general orientation of the leadership was an obstacle to workers' rule
and the rectification of
mistakes.

IV: Che and the
mid-60s debates

What were the debates
about?

The policy pursued by the Castro regime took place amidst the
well-known theoretical debates
of the mid-60s. Though Castro himself basically
abstained from this public debate it included
many top Cuban leaders along with some prominent foreign leftists like
Charles Bettelheim and
Ernst Mandel. One side, led by Che Guevara, used
supposedly Marxist arguments to justify the
economic measures the regime took under the "budget-finance" system.
The other side advanced
pseudo-communist theories to show that the "self-finance" measures
operating in the agricultural
and foreign trade sectors were needed. As shown above
and in previous CV articles on the
subject, in practice the policies carried out under both
systems were not moving Cuba toward
socialism.

Nevertheless, these days a whole mythology has developed around the
stand of Che in these
debates. Since the 1970s, Cuba has generally followed
the "self-finance" model which Che
opposed. But that hasn't stopped the Castro regime
from mounting a major campaign since the
mid-80s to promote Che's views as the antidote to whatever ails the
society he has ruled. In 1987,
for instance, Cuban economist Carlos Tablada wrote a book entitled Che
Guevara: Economics
and Politics in the Transition to Socialism which touts Che's
views as a mighty advance of
communist theory in order to claim that Castro is adopting this true
"communist" course of Che.
The cynical nature of this campaign (which is still on) is shown by the
fact that the more the talk
of the allegedly communist views of Che, the more Castro has converted
state property to private
capitalist forms, the more the economy is banking on imperialist
investment, and the more the
privileged elite demand austerity for the masses.

But what about what Che actually said? Do his theories really offer
a Marxist alternative to the
problems that have plagued Cuba and other countries where
state-capitalism has masqueraded
under a socialist signboard? Che, like his opponents, could throw
around communist-sounding
phrases. As well, the framework of his opponents
certainly deserved to be attacked as it was
heavily influenced by the anti-Marxist views in fashion in the Soviet
Union at the time. Che's
opponents painted a false picture of the state-capitalist methods of
the Soviet Union of the time
as socialist. Under the pretense that in the
transition to socialism it is not possible to immediately
dispense with all the economic methods of capitalism, they pictured
socialism as government
limitations on a capitalist economy. But in reply Che
failed to come to grips with the fact that
although in appearances the measures he advocated looked socialist, the
economy was not really
operating in this manner. He expressed concern about
the dangers that may arise from
capitalist-type measures, but didn't take into account that certain
conditions must be created
before such measures can be dispensed with. This
approach led him to insist that his policies
were correct no matter how far the actual results of these policies
diverged from what they were
supposed to accomplish. In expressing this in
theoretical terms, Che wound up with the idealist
argument that if a measure he favored existed, then reality would, of
necessity, conform to the
goals of such measures.

Ignoring harsh
realities

For instance, in Che's budget-finance system all the production
units in the state sector were
supposed to soon act as one centralized socialist enterprise.
But when it was clear that this was
not taking place, Che theorized that, by definition,
this must be what was taking place, albeit
with numerous difficulties.

Any real communist would agree with the goal of bringing the economy
under centralized
social control where commodity exchange and money cease to exist.
But if the actual situation in
the economy showed that the policies Che backed were not bringing this
about and that instead
crisis and economic anarchy were dominating the scene, then this is
evidence that these policies
are wrong. A correct communist policy is not merely
stating high-minded goals, but finding the
means to reach those goals. Che was hindered in doing
this by his overall idealist and
volunteerist approach. We have discussed in a previous
article how this outlook manifested itself
in Che's failed "focoist" strategy for creating revolutions.(19) This
approach also appears in Che's
theorizing on how the economy should be set up.

Che failed to seriously judge his budget-finance policies by how
well they were achieving their
proclaimed goals. Rather, he defended them with bogus
general theories that stood the Marxist
understanding of the relationship of ideas and the material conditions
on their head. For example,
in responding to the charge that policies supported by Che did not take
into account the
conditions then existing in Cuba, Che replies, "To think that legal
ownership or, more properly,
the superstructure of a particular State at a given time has been
imposed despite the realities of
the relationships of production is to deny precisely the determination
on which he [Charles
Bettelheim -- Mk.] relied."(20) Che argues
that since the economic base determines the
superstructure (which includes government policy and the ideas of
leaders such as Che), he must
have a correct appraisal of the economic conditions.
In contrast, Marxism holds that ideas are
correct in so far as they conform to the
material conditions. Che converts this into the view
that
it is impossible for a government policy to not be based on economic
reality. Marxism holds that
government policies are not accidents, but rather can be explained by
economic conditions. But
even though one could find an explanation for Che's policies (and his
opponents) in certain
material conditions, this by no means proves Che understood the
material conditions or that his
policies were bound to achieve their proclaimed goals.

Time and again Che argued that since budget-finance measures he
liked existed, that fact itself
proved they were helping the Cuban economy advance to socialism.
Thus Che chastised an
opponent that questioning Che's policy was the same as denying that in
general the state of the
productive forces determines the relations of production.
As Che put it: "To say that the
consolidated enterprise [under which Che's budget-finance system
grouped different production
facilities and considered them as one entity -- Mk.]
is an aberration is just about equivalent to
saying that the Cuban Revolution is an aberration" and "that our
present relationships of
production do not correspond to the development of the productive
forces, for which reason he
[Charles Bettelheim -- Mk.] anticipates significant
setbacks."(21)
Here once again Che does not
defend his preferred policies by demonstrating how they were achieving
what they were
supposed to, i.e., how well they took
into account conditions, but by arguing that government
policies he likes are necessarily in line with objective conditions.
Of course, in some parts of the
economy the opposition's "self-finance" system was operating.
Yet somehow Che doesn't
consider that this was proof of that
system's viability.

Che's efforts to settle the issues of economic forms by such
arguments are especially striking
considering his own description of the economy. Che
himself acknowledged the extensive nature
of anarchic behavior going on underneath the legal designation of state
enterprises as operating
as one entity. He notes that a production facility
"can never count on receiving supplies when
they are needed" and "often receives raw materials for a different
production process" which
"leads to technological changes that increase direct costs, labor
requirements, and, sometimes,
investment needs." As well, "we have neither
sufficient analytical capacity nor the capacity
needed to collect data," "there is a scarcity of really qualified
cadres at all levels" and "we can
also cite the lack of a central planning body that would operate
consistently." Thus, "the entire
plan is often disrupted and may require frequent adjustments."(22)

Can capitalism arise
from within the budget-finance system?

But despite Che's frankness, he sought to blow off the uncomfortable
facts by insisting that
since in his view the state sector should be
one big enterprise, it was not possible for capitalist
methods to arise there. For instance, Che could write
that "we agree that, as yet, the State sector
in no way constitutes a single large enterprise." Yet
at the same time he held that the law of value
and commodity exchange could not possibly arise within the state sector
as long as legally all the
enterprises were considered as one.

His reasoning was, did not Marx say that "In order to be a
commodity, the product has to pass
into the hands of a second party ..."?(23) True,
commodity exchange was forbidden by law in
the budgetary finance system and thus the law of value "outlawed."
But since in fact the
production facilities did not operate anything like one entity, each
production facility had to fend
for itself. Thus, rather than acting in harmony,
enterprises grabbed all the resources they could,
failed to fulfill obligations toward each other, saved resources by
cutting corners on quality, etc.
Separate interests were banned, but separate interests arose anyway.
So it seems there were all
sorts of "second parties" within the state sector.
Since scarcity and overall disorganization forced
enterprises to fend for themselves, the legalities restricting the
enterprise from so doing were
becoming an empty signboard about to crumble altogether.
In other words, the anarchy under the
banner of "one enterprise" was creating conditions for the
establishment of unplanned allocations
and output of goods between enterprises in the state sector and between
the state sector and the
mass of individual consumers. If competing enterprises
produce goods in conditions of anarchy,
they will eventually be bound by the law of value and revive commodity
exchange.

Che's arguments
against material incentives

Che has also become well-known for arguing against mainly using
material incentives as the
workers' motive for producing and for relying primarily on
uncompensated voluntary labor. He
rightly pointed out that compensation according to work was a feature
of capitalist distribution.
But once again, while Che could proclaim a worthy goal of Marxism, he
ignored the conditions
necessary to achieve this goal. Marx taught that in
order for voluntary labor to predominate, there
would have to be a very high level of the development of the productive
forces and social control
of production. Marx noted that until such material
conditions could be created, distribution
according to the amount of work performed was inevitable.

Che himself acknowledged the state of disorder and weakness of the
Cuban economy. But this
didn't keep him from insisting that in the Cuba of the mid-60s,
non-material incentives should be
the main type used. His attitude toward material
incentives was "we are unwilling to use them as
the primary instrument of motivation" because "the predominance of
material incentives
...would
retard the development of socialist morality."(24) It is no
doubt true that in so far as
direct material rewards are necessary, communist consciousness will be
limited. But what Che
ignored is that real social control of production and developing the
productive forces creates the
necessary conditions for ending distribution according to work.
Under these conditions, the need
for direct compensation will be undermined as more and more goods and
services can be
provided without regard for the amount of work each individual supplies
to society. Che failed to
see that recognizing the conditions necessary for communist methods of
work and distribution to
become dominant would not "retard" socialist morality.
By the same token, attempting to impose
measures on the workers without regard for the state of the economy and
the level of the workers'
consciousness definitely would retard the
achievement of the goals that Che talked about.

Che advocated that revolutionary consciousness would allow Cuban
society to base itself on
non-material incentives. But the consciousness he was
talking about was not the actual
consciousness that existed, but the consciousness that Che wished
existed. As we have seen, the
masses were not willing to work in a highly productive manner while
there was no relief from
austerity. Thus, the more the Castro regime pushed
"voluntary labor," the more they had to rely
on coercion, eventually ending up with semi-military regimentation of
labor. This doesn't mean
that the masses were devoid of revolutionary sentiment.
However as Marx pointed out, even
when the workers are conscious enough to carry out a socialist
revolution, this does not mean
that they are ready to jettison all the habits acquired under
capitalism, or that the new society will
quickly create all the material prerequisites to establish all the
features of the higher stage of
communism.

In the Cuban revolution, the workers never even ascended to power.
For all Che's talk about
relying on the workers' consciousness, Che, like the Castroite
leadership in general, disregarded
it. They came to power without any declared
perspective of socialism and without paying
attention to organizing a revolutionary workers' trend.
They were little concerned with providing
any real power to the workers after the revolution either.
Che did not concern himself with such
retarding of the workers' consciousness.

. While Che lashed out at those who would rely on material
incentives, as a top minister running
the Cuban economy, he did not do away with material incentives.
In fact, a strong case can be
made that he relied on them. He supported a variety of
material penalties to workers who didn't
make quotas. Meanwhile some of his measures that were
lumped under the banner of voluntary
labor were in fact coerced. As well, while some
so-called "voluntary labor" did not involve direct
material rewards to individuals, they did involve material group
rewards for various production
facilities or brigades. Today, some Castroites have
claimed that this shows that really Che had a
clear Marxist approach on this issue. Actually, it's
another example of Che's theorizing clashing
with certain realities even he was forced to reckon with.

Che's illusions in
Soviet revisionism

Che's ideas on developing the Cuban economy also rested on
unrealistic expectations about the
aid that would be provided by the Soviet Union and its East European
allies. Though Che did not
like various features of these countries, he felt they were socialist,
and that therefore they were
obligated to sacrifice their own interests so as to help build up Cuban
industry. He held that the
Soviet bloc should "develop trade formulas that permit the financing of
industrial investments in
developing countries even though this contravenes the price system
prevailing in the capitalist
world market. This would allow the entire socialist
camp to progress more evenly ..."(25) But
Che's hopes that this aid would be based on revolutionary solidarity
quickly showed themselves
to be false. For a few years, the Soviet Union
exported more to Cuba than it got back in return,
presumably as Che would have wanted it. But then the
Soviet Union's tolerance for a burgeoning
trade deficit ended. As chronicled earlier in this
article, the Soviet Union not only wanted to be
compensated for its "aid", it pressured the Cuban leaders away from
their plans for diversifying
the economy and back into Cuba's traditional lopsided reliance on sugar
exports.

Che periodically complained about economic relations with the Soviet
Union, but he never gave
up his illusions in it. For example, in his February
1964 article "On the budgetary finance
system", Che moaned about the general state of trade relations with the
Soviet Union but also
held that a new trade agreement between Cuba and the USSR was "in the
spirit of proletarian
internationalism."(26)

Che's unrealistic hopes in Soviet aid were connected to his
confusion of the Soviet Union with a
country building socialism. He saw some things going
on in the Soviet Union which he did not
like, but he did not grasp that the system developed by Stalin and the
Soviet leaders that followed
him was actually state-capitalism. He did not grasp
that the Soviet revisionists were not
interested in proletarian internationalism and that it was not an
aberration that the Soviet foreign
policy sacrificed the revolutionary struggles for the sake of big power
wheeling and dealing with
the Western imperialists. Indeed, while Che often used
bitter words against others in the Cuban
leadership who considered the 1960s economic system of the Soviet
revisionists as a model to be
followed, other times he denied that there was really any differences
of principle between them
because his rival's system "has proved that it yields practical
results, and based on similar
principles, both systems seek the same ends."(27) He had a
similar attitude toward other
revisionist systems. Che considered Yugoslavia under
Tito a type of socialist system too, despite
his objections to the pronounced capitalist-type methods employed in
its so-called
"self-administration socialism." He also considered
the Maoist path in China to be socialist.

Guevarism: the
left-sounding wing of Cuban revisionism

In what relation then, do Che's views on economic policy stand
toward the course taken by the
Castroite leadership as a whole? Che resigned his post as head of Cuban
industrial development
in 1965 and left Cuba for unsuccessful attempts at developing guerrilla
struggles in the Congo
and Bolivia, where in 1967 he met a tragic death. The
circumstances and reasons of his departure
from Cuba are the subject of much debate, but they do not change the
fact that the theoretical
legacy of Che represents no fundamental departure from Castro.
True, Che cannot be blamed for
each disastrous measure taken by Castro in the late 60s and later when
Che was out of the
picture. But Che's strong volunteerist tendencies
helped create the climate for those measures.
Che shared Castro's general faith in Soviet revisionism.
They both had illusions about Soviet
revisionist aid and considered the oppressive state-capitalist order
there as socialism. Nor did
Che challenge Castro's bureaucratic rule and denial of workers'
democracy. Rather he was an
enthusiastic supporter of Castro's methods. Che's
theoretical legacy does not represent a Marxist
alternative to the revisionist path taken in the former Soviet Union,
but an admixture of
petty-bourgeois radicalism and theories borrowed from the revisionist
states.<>

Notes

(1)A number
of Maoist
groups
consider Cuba to be "state-capitalist." But their
defense of the
model established in the Soviet Union from the 1930s until the rise of
Khrushchov limits and
undercuts this as Stalinist economic and political policy is at odds
with Marxism-Leninism, and,
in its essentials, not that different from Cuban revisionism.
The section of Trotskyism that allied
with Tony Cliff and the SWP of Britain also call Cuba, the Soviet
Union, China, etc.
state-capitalist. But Cliff's analysis that Stalinist
state-capitalism overcame anarchy of
production, succeeded in overall social planning, and that the
continued existence of the
profit-motive was only due to Russia's transactions in the external
capitalist world does not
accurately describe Soviet reality and paints it in near socialist
colors. There are also some
semi-anarchist ("Left communism," e.g.)
and anarchist trends that consider Cuba state-capitalist
by denying the necessity for a more or less lengthy period of
transitional measures for new
revolutionary society to establish real social control over production
and eliminate the vestiges of
the old capitalist society that continue to exist for a time.

(9)Bertram
Silverman concluded
from an interview in Cuba that "worker productivity may have
declined by as much as 30 percent between 1962 and 1965."
(See Man and Socialism in Cuba,
p.8.) Rene Dumont, a French
agricultural expert who traveled to Cuba several times as an
advisor, reported that "productivity of an agricultural work day had
decreased by about one-half"
from 1958 to 1963. (See Is Cuba Socialist?, p.29.

(11)Besides
various other
perks for high officials, various sources report official wage scales
where the top bureaucrats make as much as eight to ten times as the
large numbers of lower-paid
workers during the 1960s. See, for instance, Robert M.
Bernardo's The theory of moral incentives
in Cuba, p.71 or Rene Dumont's Is Cuba
Socialist?, p.58.

(12)Bernardo,
p.78.
It should be noted that Bernardo apparently considers this an example
of
"moral stimulation." Apparently, that's because for
Bernardo, voluntary labor is defined in such a
way as to become meaningless. He thinks it's voluntary
labor even if "sanctions are used too, as
part of that mechanism [of compliance for "voluntary labor" -- Mk.],
such as the myriad
difficulties of all kinds that the non-volunteer may encounter in the
future...."
(p. 26) As well,
he considers the mere fact that deprivations are suffered by the
workers to show they do so
"voluntarily". Also, he admits that
what's often called "voluntary labor" in Cuba is hard to
distinguish from simply being assigned to certain work by the
authorities. (pp. 48-9)

(15)Dumont,
pp.68-69.
Dumont does not expect that even the most highly-motivated city
dwellers would attain the productivity of experienced cane cutters.
But he points out that a good
deal of city dwellers produce at a third of the rate or less than the
section he considers real
volunteers do.

(17)For
example, the top
leadership of the Cuban trade unions were appointees of the Castro
regime. At the local level there were elected
representatives but they could not challenge the
basic policy set at the top. Workers used the
opportunity of the local elections to express their
displeasure with their lot, throwing out three-quarters of the local
leaders in 1966. See Eckstein's
Back from the future, p.35.